India

Indian authorities have spent the week containing the collateral damage from a major infrastructure lender struggling to service $12.6 billion in debt, Bloomberg News reported. Next up: Figuring out why the nation’s credit rating agencies didn’t see the crisis coming. IL&FS Group is a vast conglomerate with a complex corporate structure that funds infrastructure projects across the world’s fastest-growing major economy.

A VTB Capital-led consortium has offered to match ArcelorMittal’s 420 billion rupee ($5.8 billion) bid for Essar Steel India Ltd., heating up the long drawn battle for the biggest steel mill being sold under India’s new bankruptcy law, Bloomberg News reported. Numetal Ltd., the consortium led by VTB, is willing to revise its earlier bid of 370 billion rupees for the 10 million tons a year steel manufacturing unit, Mukul Rohatgi, the lawyer representing the company, told the nation’s top court on Thursday.

With India’s state-owned banks hamstrung by bad loans, a growing number of non-bank lenders seized the opportunity, using short-term debt funding to fuel breakneck growth in recent years. Now the sector is at the centre of a wave of selling in both bonds and equities, after an unexpected default by a major infrastructure group rattled investors and cast doubt on the credibility of rating agencies’ work, the Financial Times reported.

For Asia equity investors in search of volatility, there’s no need to buy U.S. pot stocks. India has its own wild ride, Bloomberg News reported. The turmoil in India’s non-bank finance firms has triggered swings in the nation’s stock market that make the recent moves in U.S. pot-related shares look like a walk on the grass. Volatility in the S&P BSE Finance Index has soared to the highest level in almost two years, with stocks such as Dewan Housing Finance Corp. fluctuating an average 26 percent in the past three sessions, more than the 19 percent move in Tilray Inc.

India’s finance ministry wants the central bank to consider more steps to improve liquidity in the system, including reducing the amount of funds banks must set aside with it, a senior ministry official said on Tuesday, amid a bubbling credit crunch in the Indian shadow banking industry, Reuters reported. The Reserve Bank of India (RBI) could also explore buying more bonds from the open market and open a special window for mutual funds to inject liquidity, the official told reporters.

A creditor is seeking to push India’s troubled Infrastructure Leasing & Financial Services Ltd. into insolvency, risking regulators’ efforts to calm financial markets and the group’s attempts to independently restructure its borrowings, Bloomberg News reported. Small Industries Development Bank of India on Tuesday filed an insolvency application against IL&FS and its unit at the National Company Law Tribunal in Mumbai, people familiar with the matter said. Separately, IL&FS’s biggest shareholder, Life Insurance Corp.

Indian authorities vowed to support financial markets rocked by growing concerns of defaults by shadow banks, Bloomberg News reported. The government will provide adequate liquidity to mutual funds and non-bank financial companies, Finance Minister Arun Jaitley said on Monday. His tweet followed a rare joint weekend statement from the central bank and capital markets regulator assuring investors they were monitoring the situation and would take necessary steps.

Indian authorities are battling to contain growing fears of contagion from a major infrastructure lender struggling to service debts of $12.6bn, which has driven a sell-off of stocks in the country's huge non-bank financial sector, the Financial Times reported. The benchmark Nifty index declined 1.5 per cent on Monday for its fifth consecutive daily fall, with non-bank lenders among the biggest losers. The selling has reflected concerns about recent loan defaults by Infrastructure Leasing & Financial Services, one of the sector’s biggest companies.

The turmoil in India’s non-bank finance companies is deepening, with a troubled lender disclosing further missed debt payments late on Friday and panic seeping into what has been Asia’s best-performing stock market, Bloomberg News reported. The benchmark equity index had its wildest intraday move in more than four years before closing with a 0.8 percent loss on Friday as investors remained jittery about the nation’s financial shares after a recent default by Infrastructure Leasing & Financial Services Ltd. A measure of investor anxiety surged to its highest level in more than four months.

Infrastructure Leasing & Financial Services Ltd., an Indian conglomerate that has missed payment on more than five of its obligations since August, is seeking to raise more than 300 billion rupees ($4.2 billion) selling assets to cut debt, according to an internal memo seen by Bloomberg.